Houston’s retail market moves into 2017 with a healthy outlook. Not much changed between quarters with vacancy rates ticking up only 20 basis points. Although Houston lost about 80,000 high income jobs between 2014 and 2016, retail market indicators show no signs of a struggling economy. Approximately 68% of the retail space under construction at the close of Q1 2017 is pre-leased. Despite the 1.5M SF of new inventory delivered in the first quarter, Houston’s average retail vacancy rate remains low at 5.6%.
Houston’s retail leasing activity, which includes renewals, decreased over the quarter from 1.6M SF in Q4 2016 to 1.1M SF in Q1 2017. Most of the high-end class A space located inside the city limits is 90-100% leased. It is hard to find good quality well located available space. Most of the space that is available is in projects under construction located in the suburbs near new master-planned residential development, and will most likely be leased and occupied by discount retailers, service businesses, restaurants, and entertainment concepts.
Q1 2017 Highlights
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